Apple to fix iPhone security flaw

Apple is set to release a software patch to address a recently described security flaw in the iPhone, the UK network operator 02 has said. Experts revealed on Thursday that modified SMS messages could result in iPhones being disconnected from the network or hijacked altogether.

Phones incorporating the Windows Mobile and Google Android operating systems are also vulnerable, they said. An O2 spokesperson said the patch would be available on Saturday from iTunes.

“We will be communicating to customers both through the website and proactively,” the spokesperson added.

“We always recommend our customers update their iPhone with the latest software and this is no different.”

Access all areas

Charlie Miller and Collin Mulliner told the Black Hat conference in Las Vegas that the hack works by slightly modifying the data – sent by the network and which the user does not see – that arrives as part of a text message.

The system that processes such messages is similar across different operating systems and can, once compromised, gain access across a range of applications including a phone’s address book or camera.

The team say that hackers could develop programs to exploit the weakness in as little as two weeks, but told the conference that publicising the means of attack was necessary to ensure the problem was addressed.

“If we don’t talk about it, somebody is going to do it silently. The bad guys are going to do it no matter what,” Mr Mulliner, an independent security expert, said.

The team wrote software to exploit the weakness, targeting iPhones on four networks in Germany as well as AT&T in the US. However, they believe it would work equally well in any country.

The approach is particularly dangerous because messages are delivered automatically, and users cannot tell that they have received the malicious code.

The problem could be fixed by directly patching the vulnerability in smartphones’ operating systems, or the network providers could scan for messages that look to be trying to gain access to phones via the malicious code.

The researchers said they had informed Google of the hack and that the company had already taken steps to address the problem.

The Black Hat gathering, part of a leading series of conferences for information and computer security experts, took place from 25 to 30 July. Apple were not available to comment on the flaw.

In rare miss, Apple 4s earnings disappoint

Apple, the juggernaut of consumer electronics, stumbled in its latest quarter, as the later-than-usual launch of the new iPhone held back sales.

On Tuesday, Apple reported earnings and revenue that came in below analyst expectations, sending its stock down 7 percent.

It was a rare miss for the seemingly unstoppable company and an inauspicious start for new CEO Tim Cook. But he promised that sales would come roaring back in the current quarter, when the iPhone 4S went on sale. Even in the just-ended quarter, earnings and revenue grew at rates that would be the envy of any large company.

Investors and analysts had expected the new phone to arrive in September, but Apple held off until Friday, delaying the sales surge into the new quarter.

Even so, iPhone sales were up 21 percent from last year at 17.1 million, a remarkable achievement considering that the flagship model at the time, the iPhone 4, was more than a year old. Analysts, however, were hoping for 20 million.

Michael Walkley, an analyst for Canaccord Genuity, said the sales shortfall was all because of the timing of the iPhone 4S. He said Apple will make up for it in the next few months.

“The growth story hasn’t changed,” he said.

Net income in the fiscal fourth quarter was $6.62 billion, or $7.05 per share. That was up 54 percent from $4.31 billion, or $4.64 per share, a year ago. Analysts polled by FactSet were expecting $7.28 per share.

Revenue was $28.3 billion, up 39 percent. Even though it wasn’t an all-time record, it was the highest for the July-to-September quarter. Analysts were expecting $29.4 billion.

Laptops were Apple’s strongest category in the quarter, with sales up 30 percent from the previous quarter thanks to the release of a new operating system, Lion. Total Mac sales set an all-time record at 4.9 million. Apple’s figures are bucking the trend for the PC market in general, which is seeing anemic growth.

Apple’s said it expects earnings of $9.30 per share and revenue of $37 billion. Apple usually low-balls its forecasts, and analyst figures are usually higher. But in this case, analysts had lower figures, expecting earnings of $9 per share and revenue of $36.7 billion.

In the full fiscal year, Apple earned $25.9 billion, or $27.68 per share. That was up 85 percent from the previous year. Revenue was $108 billion, up 66 percent.
Apple’s stock fell $28.26, or 6.7 percent, to $393.98 in afterhours trading following the release of results. That wiped out one week of gains. At the close of regular trading, it was the world’s most valuable company, but the stock drop means it’s yielding the position to Exxon Mobil Corp.

Steve Jobs relinquished his position as CEO in August, after going on medical leave in January. He died Oct. 5 after years of battling pancreatic cancer. Apple will close its stores for several hours Wednesday so employees can watch a webcast of a Jobs memorial service at Apple’s Cupertino, Calif., headquarters, according to a person familiar with the matter, who spoke on condition of anonymity and was not authorized to speak publicly.

New CEO Cook told analysts on a conference call that China continues to be the fastest-growing market for the company. In the latest quarter, sales were up nearly four times from last year and made up one-sixth of Apple’s overall sales.

“It’s an area of enormous opportunity. … The sky’s the limit in there,” Cook said.

On Monday, Apple said it had sold more than 4 million units of the new iPhone 4S in the first three days. That’s more than twice the number it sold in the three days after the launch of the earlier model last year.

“In our wildest dreams we couldn’t have gotten off to a start as great as we have on the 4S,” Cook said.

Holiday sales of Macs are threatened by massive flooding in Thailand, which has knocked out several factories that make hard disk drives.

“I’m virtually certain there will be an overall industry shortage of disk drives as a result of the disaster. How it affects Apple I’m not sure,” Cook said.